Britain suspended the constitution, parliament and government of the Turks and Caicos Islands yesterday after a damning report on corruption.

A UK probe had found a "high probability of systemic corruption or serious dishonesty", Overseas Territories Minister Gillian Merron told MPs.

Ms Merron told the British Parliament: "The government has formed the view that parts of the constitution will need to be suspended and has decided to take steps to enable it to do so."

Under the government's proposals the islands' House of Assembly, cabinet and ministerial powers would be suspended, with functions transferring to the territory's Governor.

Turks and Caicos, which has a population of 30,000, is known as a tourism and offshore financial centre and has a similar political set-up to Bermuda.

An inquiry into the island's administration led by retired senior judge Sir Robin Auld was launched last year after a highly critical report by the Commons Foreign Affairs Select Committee which found "a palpable climate of fear" on the Caribbean islands.

At the centre of the corruption claims is the islands' Premier, Michael Misick, who is alleged to have built up a multi-million dollar fortune since he was elected to power in 2003.

Mr. Misick and his fellow government ministers are alleged to have sold off Crown land to property developers for their own personal gain.

Mr. Misick, who was the guest of honour of the Progressive Labour Party at their annual banquet in 2003, where he encouraged the PLP to be all inclusive and operate on principles of integrity, transparency and openness, will step down as leader at the end of the month.

He has already been replaced as leader of his party by one of the few government ministers not to go before a Commission of Inquiry into corruption former Home Affairs Minister Galmo Williams.

Yesterday Bermuda's Premier Ewart Brown, who is a friend of Mr. Misick, said: "I am sad to see it happen. I will be going down there soon, it is not a happy day for Turks or for any of us in the Overseas Territories.

"I am just hoping they will be able to come out of it."

Dr. Brown would not say whether the Turks had brought the situation on themselves.

Turks and Caicos Islands Governor Gordon Wetherell, in a broadcast to the nation, said the constitution will be partially suspended for two years following receipt of the final Commission of Inquiry report into government corruption, which is due on or before April 30, 2009.

An Order in Council to this effect has been drafted and is to be made public on Monday.

The initial two-year suspension may be shortened or extended if circumstances demand, but as it stands, is likely to be in effect until the next constitutionally mandated general election, in 2011. "As drafted, the Order would leave in place important elements of the constitution such as the fundamental rights chapter and provisions relating to the Governor, the courts and the public service, while removing the cabinet, House of Assembly and references to ministerial and related powers."

Powers currently exercised by Ministers will be exercised by the Governor including public finances, legislation and regulatory reforms.

An advisory council is to be established to assist the Governor in the formulation of policy and the exercise of his functions. According to the Caribbean Net News the new advisory council will consist of seven members, of which five must be TCI belongers, who are also registered voters.

According to Sir Robin, the probe into TCI found "clear signs of political amorality and immaturity and general administrative incompetence".

In addition, Mr. Wetherell said, it "has demonstrated a need for the urgent suspension in whole or in part of the Constitution, and for other legislative and administrative reforms and change."

This is the second time in 23 years that the TCI constitution has been suspended.